UniCredit Automotive Credit Conference

Transcription

1 UniCredit Automotive Credit Conference Ticker: CON ADR-Ticker: CTTAY Wolfgang Schaefer CFO

2 AGENDA 1 Highlights Results Q Indebtedness and Cash Flow 8 4 Opportunities and Challenges Medium Term 11 5 Outlook Back-up: Q Results Presentation 23 EDMR Equity and Debt Markets Relations 2

3 1) Highlights 2016 Continental Corporation Sales, EBIT & Net Income 1 (in mn) US GAAP IFRS 39,232 40,549 32,736 33,331 34,506 30,505 24,239 26,047 20,096 4,116 4,096 Sales EBIT NIAT 1 11,233 11,408 11, ,597 1, ,619 13,837 14,887 1,507 1,602 1, , ,040 1, ,597 1,242 3,186 3,264 1,905 1,923 3,345 2,375 2,727 2,802-1,124-1, Net income attributable to the shareholders of the parent, from 1998 until 2003 US GAAP / from 2004 onwards IFRS. 2 Siemens VDO incorporated starting December 1, IAS 19 (rev. 2011) applied starting The 2012 figures have been restated accordingly. EDMR Equity and Debt Markets Relations 3

4 1) Highlights 2016 Very Sound Balance Sheet % Gearing ratio 2 Equity ratio 2 41% Leverage ratio % 22% H1/09 FY 2016 H1/09 FY 2016 H1/09 FY 2016 Continental s current credit rating is: Fitch since October 24, 2016: BBB+, outlook stable S&P since May 11, 2016: BBB+, outlook stable Moody s since June 30, 2015: Baa1, outlook stable Continental s targets: Rating: BBB / BBB+ Gearing ratio: <20% Equity ratio: above 35% Leverage ratio 1 : well below 1.00x 1 Leverage covenant ratio as defined in syndicated loan agreement; IAS 19 (rev. 2011) applied for IAS 19 (rev. 2011) applied for 2016 EDMR Equity and Debt Markets Relations 4

5 2) Results Q Sales and Adjusted EBIT 1 by Quarter FY Sales 39,232 mn FY Sales 40,549 mn Q1 Sales 11,000 mn Adj. EBIT 1 1,166 mn 9,569 10,030 9,618 10,016 9,851 10,191 9,984 10,524 11,000 1,090 1,166 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Sales (mn ) Adj. EBIT (mn ) 1 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 5

6 2) Results Q Automotive Group and Rubber Group by Quarter Automotive Group Rubber Group Sales (mn ) Adj. EBIT (mn ) 1 1 Sales (mn ) Adj. EBIT (mn ) 5,912 5,996 5,661 6,005 6,011 6,158 5,958 6,370 6,754 3,669 4,045 3,968 4,022 3,852 4,045 4,038 4,164 4, Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 6

7 2) Results Q Sustainable Value Creation 19.5% 20.3% 21.6% 20.9% 21.1% 21.2% 18.9% 20.0% 20.0% 17,510 18,198 18,910 19,681 19,767 19,983 20,106 20,453 20,978 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Trailing OA (mn ) Trailing operating assets are calculated as assets for the last twelve months (LTM) 2 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by trailing operating assets Trailing ROCE EDMR Equity and Debt Markets Relations 7

8 3) Indebtedness and Cash Flow Cash Flow Overview Cash Flow Q and Q (mn ) before acquisitions before acquisitions Cash flow from operating activities Cash flow used for investing activities Free cash flow EDMR Equity and Debt Markets Relations 8

9 3) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio Net indebtedness (mn ) Gearing ratio 34% 34% 34% 27% 23% 26% 24% 19% 18% 4,099 4,236 4,296 3,542 3,083 3,446 3,298 2,798 2,768 Q1 H1 9M YE Q1 H1 9M YE Q1 H1 9M YE EDMR Equity and Debt Markets Relations 9

10 3) Indebtedness and Cash Flow Maturities for Bonds 1 (mn ) As at March 31, 2017 (mn ) FY 16 Q1 17 Gross indebtedness 4,952 4,723 Cash 2,107 1,896 Net indebtedness 2,798 2,768 Available credit lines 3,888 3,862 Total liquidity 5,995 5,758 1, Bonds 1 All amounts shown are nominal values EDMR Equity and Debt Markets Relations 10

11 4) Opportunities and Challenges Medium Term Strong Order Intake Causes Rise in R&D Expenses 40 Automotive Group: Rise in R&D Caused by Strong Order Intake (bn ) % 6.0% 5.8% 6.2% 6.1% 6.9% 6.8% Order intake (LTS) 1 R&D as percentage of OI 1 LTS = Life time sales EDMR Equity and Debt Markets Relations 11

12 4) Opportunities and Challenges Medium Term Successful Transformation to Electronics and Software 225% Automotive Group: Rise in R&D not Harmful to Gross Earnings 175% 125% 100% 75% R&D Expenses Gross Earnings EDMR Equity and Debt Markets Relations 12

13 4) Opportunities and Challenges Medium Term Approaching Automated Driving: Three-Layer Model Market for Automated Driving > 20 bn 1 by 2020 Components Sensors System Electronics Software Integration Environmental Model Software Electronics 1 Source: Continental estimates EDMR Equity and Debt Markets Relations 13

14 4) Opportunities and Challenges Medium Term Component Layer: ADAS Sales Split by Region E 1% 2% 2% 2% 30% 27% Europe North America 23% 27% Sales 2016: > 1.2 bn China Japan Sales 2020: > 2 bn 4% 36% South Korea ROW 1 12% 34% 1 Rest Of World EDMR Equity and Debt Markets Relations 14

15 4) Opportunities and Challenges Medium Term AES: Engine Roadmap Electrification View Versus previous expectation: More variants of hybridization due to decline in Diesel Stronger increase in pure Electric Vehicles [mn units] % : close to 60% of the market will be electrified EV PHEV 2020E FHEV MHEV 2025E Pure ICE 2030E Source: Continental estimates EV: Electric Vehicle PHEV: Plug-in Hybrid Electric Vehicle FHEV: Full Hybrid Electric Vehicle MHEV: 48V Mild Hybrid Electric Vehicle Pure ICE: Pure ICE (no electrification) EDMR Equity and Debt Markets Relations 15

16 4) Opportunities and Challenges Medium Term AES - Relative Value of Continental s Content in Powertrains 1 Gasoline-related business Diesel-related business HEV-related business including extended offering BEV-related business including extended offering 100% 1 160% % 400% Engine management systems for solenoid direct injection (injector, ECU, pressure pumps) Exhaust after-treatment Sensors and actuators Turbochargers Engine management systems for diesel piezo common rail injection (injector, ECUs, pressure pumps) Exhaust after-treatment Sensors and actuators Engine management systems (gasoline/diesel) Exhaust after-treatment Sensors and actuators Turbochargers and 48V solutions (12kW/ 15kW/ 25kW) or Plug-in hybrid solutions (incl. thermal components & charging systems) Well positioned in all key technologies! High voltage axle drive Power electronics Onboard charging systems Battery management systems DC/DC converter Thermal management components 1 Value of displayed gasoline content per car is indexed at 100%; all other values read relative to the gasoline content EDMR Equity and Debt Markets Relations 16

17 4) Opportunities and Challenges Medium Term Adapted Electrification Strategy Summary HEV-related business will grow to up to 1bn by 2020/21 as currently confirmed in order backlog By spending 300mn cumulative (until 2021) in plant and R&D we are positioning ourselves for up to 2bn additional business opportunity in HEV Due to higher share of commercial vehicle diesel business, diesel sales remains stable despite lower passenger car engine penetration HEV-related business will allow to compensate the business at risk from the ICE-related area [ bn] Sales development of Powertrain business (incl. HEV) 15.0 ~ ~6.2 ~11 ~1 ~9 ~ Diesel < < 2020E Gasoline >2 ~ E HEV EDMR Equity and Debt Markets Relations 17

18 4) Opportunities and Challenges Medium Term More than 50 bn in Sales and >20% in ROCE >50,000 40,550 26,047 19% 20% >20% 13,837 12% Global PC & LT 1 Production E : CAGR 3% Sales (mn ) : CAGR 4% ROCE E: CAGR 1-2% 1 Passenger car and light truck EDMR Equity and Debt Markets Relations 18

19 5) Outlook 2017 Market Outlook for Major Regions PC & LT 1 Production (mn units) 2016E 2017E Commercial Vehicle 2 Prod. (k units) 2016E 2017E 1,789 1, Europe IHS and own estimates North South Asia Europe North South Asia America America IHS and own estimates America America PC & LT Repl. 3 Tire Market (mn units) CV Repl. 4 Tire Market (mn units) 2016E 2017E 2016E 2017E Europe LMC and own estimates North America South America Asia 1 Passenger car and light truck <6t 2 Heavy vehicles >6t 3 Passenger car & light truck replacement 4 Commercial vehicle replacement (radial and biased) Europe LMC and own estimates North America South America Asia EDMR Equity and Debt Markets Relations 19

20 5) Outlook 2017 Continental Corporation E Consolidated sales adj. EBIT 1 margin Automotive Group adj. EBIT 1 Rubber Group adj. EBIT 1 Raw material cost impact Special effects Net interest result Tax rate Capex PPA Free cash flow before acquisitions 40.5 bn 4.3 bn 24.5 bn 1.6 bn 16.1 bn 2.8 bn Relief of about 150 mn - 70 mn mn 28% 2.6 bn 144 mn 2.3 bn To increase to > 43.5 bn at constant FX rates >10.5% adj. EBIT 1 margin To increase to > 26 bn at constant FX rates ~8.5% adj. EBIT 1 margin To increase to > 17 bn at constant FX rates >15% adj. EBIT 1 margin Raw materials to burden Rubber Group with about 500 mn About mn ~- 200 mn at constant FX rates <30% Capex at around 6.5% of sales PPA amortization: ~ 200 mn ~ 2 bn 1 Before amortization of intangibles from PPA, consolidation (2016 in comparison to 2015) and special effects EDMR Equity and Debt Markets Relations 20

21 Thank you! EDMR Equity and Debt Markets Relations 21

22 Disclaimer This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Automotive Credit Conference in London, organised by UniCredit on May 17-18, It has not been independently verified. It does not constitute an offer, invitation or recommendation to purchase or subscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any part of it form the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or sale of such shares or other securities whatsoever. Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss that may arise from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation includes assumptions, estimates, forecasts and other forward-looking statements, including statements about our beliefs and expectations regarding future developments as well as their effect on the results of Continental. These statements are based on plans, estimates and projections as they are currently available to the management of Continental. Therefore, these statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Furthermore, although the management is of the opinion that these statements, and their underlying beliefs and expectations, are realistic as of the date they are made, no guarantee can be given that the expected developments and effects will actually occur. Many factors may cause the actual development to be materially different from the expectations expressed here. Such factors include, for example and without limitation, changes in general economic and business conditions, fluctuations in currency exchange rates or interest rates, the introduction of competing products, the lack of acceptance for new products or services and changes in business strategy. All statements with regard to markets or market position(s) of Continental or any of its competitors are estimates of Continental based on data available to Continental. Such data are neither comprehensive nor independently verified. Consequently, the data used are not adequate for and the statements based on such data are not meant to be an accurate or proper definition of regional and/or product markets or market shares of Continental and any of the participants in any market. Unless otherwise stated, all amounts are shown in millions of euro. Please note that differences may arise as a result of the use of rounded amounts and percentages. EDMR Equity and Debt Markets Relations 22

23 Back-up Q Results as of May 9, 2017 EDMR Equity and Debt Markets Relations 23

24 1) Corporation Highlights Most Important KPIs for Q Sales up by 12% to 11 bn; organic sales growth at 10%; FX positive at 96 mn Adj. EBIT 1 up by 7% to 1.2 bn; adj. EBIT 1 margin at 10.7% (PPA 2-41 mn and special effects + 12 mn) NIAT 3 amounted to 750 mn, up by 2% as net interest result was mainly negatively impacted by FX as forecast Free cash flow amounted to 133 mn including 231 mn cash outflow for acquisitions (mainly for Hornschuch); free cash flow before acquisitions amounted to 364 mn Gearing ratio at 18%; equity ratio improved to 42% Value creation: trailing ROCE 4 sustained at 20% Other topics: 750 mn bond with a coupon of 2.5% p.a. redeemed at maturity on March 20, 2017 Order intake in the Automotive Group increased to more than 9.5 bn in Q Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA 3 Attributable to the shareholders of the parent 4 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM EDMR Equity and Debt Markets Relations 24

25 1) Corporation Highlights Divisional Highlights for Q Automotive Group Rubber Group Chassis & Safety: 9.6% adj. EBIT 1 margin (PY: 9.7%); organic sales up by 12.5%; ADAS unit sales up by 40%; more than 34 mn camera, lidar and radar sensors sold since 2014 Powertrain: 6.3% adj. EBIT 1 margin (PY: 4.0%); organic sales up by 9.5% driven by strong growth in engine ECUs and injector business; operating leverage 2 at 29%, displaying solid capacity utilization Interior: 8.9% adj. EBIT 1 margin (PY: 8.4%); organic sales increased by 11.9% on strong growth in business units Body & Security and Instrumentation & Driver HMI Automotive Group: Organic sales increased by 11.3%, exceeding worldwide car production by >6%-points; second quarter sales continue to trend strong; adj. EBIT 1 margin increased by 80 bps to 8.4% in a usually slow quarter; order intake in the Automotive Group increased to more than 9.5 bn Tires: adj. EBIT 1 down by 9% as guided; volume growth amounted to 5%; FX contributed 1.5%; price/mix was +1%; organic sales up by 6.3% Tire markets: PC & LT tire replacement demand in Europe and North America up by 6% and 2% respectively ContiTech: adj. EBIT 1 margin stayed at 9.6%; organic sales up by 7.6%; ContiTech suffered about 9 mn from first time consolidation of Hornschuch (PPA 3 and step-up effects) of which only PPA 3 amounting to 1.7 mn is adjusted for in Q Rubber Group: Organic sales up by 6.9% and adj. EBIT 1 margin down to 15.1% (PY: 17.2%); raw materials had a negative impact of 100 mn in Q1 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Operating leverage is defined as delta adj. EBIT 1 divided by delta adjusted sales 3 Amortization of intangibles from PPA EDMR Equity and Debt Markets Relations 25

26 1) Corporation Highlights Selected Press Clippings Released Until Recently Growing Faster with New Mobility Services Go to press release Continental und China Unicom Smart Connection Technology sign a strategic joint venture contract. The New Joint Venture will establish and operate a world class Intelligent Transportation Systems (ITS) solution provider to satisfy the increasing market demands of China. Continental Uses Road Condition Detection for Active Driving Safety Wet and icy road conditions are frequent causes of accidents. Even experienced drivers can misjudge how well the tires are gripping the road. The international technology company Continental is developing a new solution called Road Condition Observer in response to this threat. New Continental Control Unit is Control Center in All Mercedes E-Class Go to press release Go to press release Whether it's a gasoline vehicle, diesel vehicle, or a plug-in hybrid: in all models of the new Mercedes E-Class, the central powertrain controller (CPC) from Continental acts as a gateway in taking on the role of the drive's electronic control center. Go to press release Continental to equip Cat Off- Highway-Trucks Continental and Caterpillar Inc. have signed an agreement to equip Cat Off-Highway-Trucks (model series 770 to 775) with Continental RDT-Master tires in sizes 18.00R33, 21.00R33 and 24.00R35. ContiTech Presents Digital Solutions for the Conveyor Industry International technology company ContiTech is expanding its portfolio of industrial applications for the conveyor belt industry. Alongside conveyor belts, the company is working hard on smart systems and expanding its range of services. Continental Gestures to a Safer Future To improve non-verbal communication between drivers and their vehicles, the international technology company Continental has devised a range of user-friendly touch gestures for the cockpit. Drivers can draw specific, defined symbols on the input display to instantly trigger a diverse array of functions and features for rapid access. Go to press release Go to press release EDMR Equity and Debt Markets Relations 26

27 1) Corporation Highlights Sales and Adjusted EBIT 1 by Quarter FY Sales 39,232 mn FY Sales 40,549 mn Q1 Sales 11,000 mn Adj. EBIT 1 1,166 mn 9,569 10,030 9,618 10,016 9,851 10,191 9,984 10,524 11,000 1,090 1,166 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Sales (mn ) Adj. EBIT (mn ) 1 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 27

28 1) Corporation Highlights Automotive Group and Rubber Group by Quarter Automotive Group Rubber Group Sales (mn ) Adj. EBIT (mn ) 1 1 Sales (mn ) Adj. EBIT (mn ) 5,912 5,996 5,661 6,005 6,011 6,158 5,958 6,370 6,754 3,669 4,045 3,968 4,022 3,852 4,045 4,038 4,164 4, Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 28

29 1) Corporation Highlights Growth Profile of the Corporation Q Automotive Group organic sales growth PC & LT prod. growth ww PC & LT prod. growth Europe and North America 4% 5% 11% Conti Market ContiTech organic sales growth PC & LT prod. growth Europe GDP growth advanced economies % 5% 8% Conti Market 1 According to IMF definition (WEO Update April 2017) Passenger & Light Truck Tires volume growth Replacement tire volume growth Europe Replacement tire volume growth North America 2% 5% 6% Conti Market Commercial Vehicle Tires volume growth Replacement tire volume growth Europe Replacement tire volume growth North America 11% 12% 15% Conti Market EDMR Equity and Debt Markets Relations 29

30 1) Corporation Highlights Sustainable Value Creation 19.5% 20.3% 21.6% 20.9% 21.1% 21.2% 18.9% 20.0% 20.0% 17,510 18,198 18,910 19,681 19,767 19,983 20,106 20,453 20,978 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Trailing OA (mn ) Trailing operating assets are calculated as assets for the last twelve months (LTM) 2 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by trailing operating assets Trailing ROCE EDMR Equity and Debt Markets Relations 30

31 1) Corporation Highlights Maturities for Bonds 1 (mn ) As at March 31, 2017 (mn ) FY 16 Q1 17 Gross indebtedness 4,952 4,723 Cash 2,107 1,896 Net indebtedness 2,798 2,768 Available credit lines 3,888 3,862 Total liquidity 5,995 5,758 1, Bonds 1 All amounts shown are nominal values EDMR Equity and Debt Markets Relations 31

32 2) Automotive Group Sales and Adj. EBIT 1 by Division Automotive Group Sales (mn ) Q Automotive Group Adj. EBIT 1 (mn ) Q , , % 11.3% % 8.4% 2,497 2, % % 12.5% 9.6% Chassis & Safety Organic sales growth (%) Powertrain Interior cons. Automotive Group Reported change in sales Chassis & Safety: 13.4% Powertrain: 10.5% Interior: 13.4% Automotive Group: 12.4% 1 Before amortization of intangibles from PPA, consolidation and special effects Chassis & Safety Adj. EBIT 1margin (%) Powertrain Interior cons. Automotive Group Reported EBITDA: 824 mn (12.2% of sales) Reported EBIT: 542 mn (8.0% of sales) R&D: 676 mn (10.0% of sales) Capex: 287 mn (4.3% of sales) EDMR Equity and Debt Markets Relations 32

33 2) Automotive Group Q1 2017: Strong Start to the Year Automotive Group Sales (mn ) Adj. EBIT 1 (mn ) and Adj. EBIT 1 Margin 6,011 6,158 5,958 6,370 6, % 8.4% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Sales increased by 743 mn; organic sales growth in Q at 11.3% Adj. EBIT 1 increased by 112 mn; operating leverage 2 at 16% Adj. EBIT 1 margin at 8.4% (PY: 7.6%) 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Operating leverage is defined as delta adj. EBIT 1 divided by delta adjusted sales EDMR Equity and Debt Markets Relations 33

34 3) Rubber Group Profitability Temporarily Impacted by Rising Raw Materials Rubber Group Sales (mn ) Q Rubber Group Adj. EBIT 1 (mn ) Q ,756 4, % 6.9% 17.9% 15.1% 1, % 142 Organic sales growth (%) 9.6% 1 Adj. EBIT margin (%) ContiTech Tires cons. Rubber Group ContiTech Tires cons. Rubber Group Reported change in sales ContiTech: 11.9% Tires: 9.7% Rubber Group: 10.6% Reported EBITDA: 843 mn (19.8% of sales) Reported EBIT: 622 mn (14.6% of sales) R&D: 105 mn (2.5% of sales) Capex: 215 mn (5.0% of sales) 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 34

35 3) Rubber Group Q1 2017: Challenging Start to the Year Rubber Group Sales (mn ) Adj. EBIT 1 (mn ) and Adj. EBIT 1 Margin 3,852 4,045 4,038 4,164 4, % % Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Healthy sales growth on abating pressure from rising raw materials prices; sales increased by 409 mn; organic sales growth at 7% Adj. EBIT 1 decreased by 35 mn as raw material cost negatively impacted the quarter with about 100 mn; adj. EBIT 1 margin at 15.1% (PY: 17.2%) First time consolidation of Hornschuch negatively impacted ContiTech EBIT with about 9 mn 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 35

36 3) Rubber Group Expected Raw Material Price Development in 2017 Natural rubber price (TSR 20) expected to average U.S. $2.25 in 2017 (PY: U.S. $1.38) Synthetic rubber price (butadiene feedstock) forecasted to average U.S. $2.45 in 2017 (PY: U.S. $1.13) U.S. $50 mn gross burden expected for every U.S. $10 rise in oil price (average was U.S. $44 in 2016) Average (Y) TSR 20: 316 Butadiene: 244 Raw Material Price Development E (U.S. cents/kg) Average (Y) TSR 20: 251 Butadiene: 148 Average (Y) TSR 20: 172 Butadiene: 132 Average (Y) TSR 20: 137 Butadiene: 90 Average (Y) TSR 20: 138 Butadiene: Average (Y) TSR 20: 225 Butadiene: Headwind from rising raw materials cost to amount to about 500 mn in Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17E Q3/17E Q4/17E Biggest negative impact expected for Q2 2017; PM will start to offset raw material headwinds in course of H TSR 20 (U.S. cents/kg) Butadiene (U.S. cents/kg) 1 Source: Bloomberg and Continental estimates for 2017 EDMR Equity and Debt Markets Relations 36

37 4) Indebtedness and Cash Flow Net Indebtedness Bridge (mn ) Gearing ratio 2,798 19% 680 mn outflow from change in working capital 970 2,768 18% Net indebtedness (FY 2016) Capex Acquisitions Change in receivables Change in inventories Change in payables Depr. and amortization Other CF Net indebtedness (Q1 2017) 1 1 According to cash flow statement incl. intangible assets EDMR Equity and Debt Markets Relations 37

38 4) Indebtedness and Cash Flow Cash Flow Overview Cash Flow Q and Q (mn ) before acquisitions before acquisitions Cash flow from operating activities Cash flow used for investing activities Free cash flow EDMR Equity and Debt Markets Relations 38

39 4) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio Net indebtedness (mn ) Gearing ratio 34% 34% 34% 27% 23% 26% 24% 19% 18% 4,099 4,236 4,296 3,542 3,083 3,446 3,298 2,798 2,768 Q1 H1 9M YE Q1 H1 9M YE Q1 H1 9M YE EDMR Equity and Debt Markets Relations 39

40 5) Outlook 2017 PC & LT Production by Quarter in Major Regions 1 Europe (mn units) North America (mn units) China (mn units) 2015: E: E: : E: E: : E: E: % % 2% -7% 15% 8% 7% 14% 7% 2% 3% 1% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17E Q2/17E Q3/17E Q4/17E % 3% 6% 5% 2% 9% -1% 2% 5% -5% 3% 4% 1% 2% 4% 3% 4% 2% 1% 0% 2% -4%-5% -3% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17E Q2/17E Q3/17E Q4/17E Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17E Q2/17E Q3/17E Q4/17E Europe chg YOY North America chg YOY China chg YOY 1 Source: IHS and own estimates, Europe excluding Kazakhstan and Uzbekistan 40 EDMR Equity and Debt Markets Relations

41 5) Outlook 2017 Market Outlook for Major Regions PC & LT 1 Production (mn units) 2016E 2017E Commercial Vehicle 2 Prod. (k units) 2016E 2017E 1,789 1, Europe IHS and own estimates North South Asia Europe North South Asia America America IHS and own estimates America America PC & LT Repl. 3 Tire Market (mn units) CV Repl. 4 Tire Market (mn units) 2016E 2017E 2016E 2017E Europe LMC and own estimates North America South America Asia 1 Passenger car and light truck <6t 2 Heavy vehicles >6t 3 Passenger car & light truck replacement 4 Commercial vehicle replacement (radial and biased) Europe LMC and own estimates North America South America Asia EDMR Equity and Debt Markets Relations 41

42 5) Outlook 2017 Continental Corporation E Consolidated sales adj. EBIT 1 margin Automotive Group adj. EBIT 1 Rubber Group adj. EBIT 1 Raw material cost impact Special effects Net interest result Tax rate Capex PPA Free cash flow before acquisitions 40.5 bn 4.3 bn 24.5 bn 1.6 bn 16.1 bn 2.8 bn Relief of about 150 mn - 70 mn mn 28% 2.6 bn 144 mn 2.3 bn To increase to > 43.5 bn at constant FX rates >10.5% adj. EBIT 1 margin To increase to > 26 bn at constant FX rates ~8.5% adj. EBIT 1 margin To increase to > 17 bn at constant FX rates >15% adj. EBIT 1 margin Raw materials to burden Rubber Group with about 500 mn About mn ~- 200 mn at constant FX rates <30% Capex at around 6.5% of sales PPA amortization: ~ 200 mn ~ 2 bn 1 Before amortization of intangibles from PPA, consolidation (2016 in comparison to 2015) and special effects EDMR Equity and Debt Markets Relations 42

43 Appendix EDMR Equity and Debt Markets Relations 43

44 6) Back-up Corporation Highlights Q Sales EBITDA EBIT NIAT 3 EPS 3 Capex R&D Cash flow Net debt PaSO Increase of 11.7% to 10,999.9 mn (PY: 9,850.7 mn); organic sales up 9.5% Increase of 8.8% to 1,638.5 mn (PY: 1,505.5 mn) Increase of 9.1% to 1,135.1 mn (PY: 1,040.7 mn); Adj. EBIT 1 increase to 1,165.5 mn (10.7% adj. EBIT 1 margin); PPA 2 effect mn; total special effects mn Increase of 2.1% to mn (PY: mn) EPS of 3.75 (PY: 3.67) EPS before PPA (PY: 3.79 before PPA 2 ) Capex increased to mn (PY: mn); capex ratio 4.6% of sales; capex to depreciation coverage 1.0x (1.1x ex PPA 2 ) Expenses for research and development increased by 9.0% to mn (PY: mn); R&D ratio 7.1% of sales (PY: 7.3%) Operating cash flow down by mn to mn; free cash flow at mn Net indebtedness down by 30.2 mn to 2,767.6 mn vs. FY 2016; Liquidity and undrawn credit lines amounted to 5,758.1 mn Pensions and similar obligations amounted to 4,092.8 mn 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA, tax rate of 28% applied for EPS calculation 3 Attributable to the shareholders of the parent EDMR Equity and Debt Markets Relations 44

45 6) Back-up Overview of Volume Development Units (YOY change) Q1/15 H1/15 9M/15 FY 15 Q1/16 H1/16 9M/16 FY 16 Q1/17 Market data for PC and LT production Europe 4% 3% 4% 4% 2% 5% 3% 3% 5% North America 1% 2% 3% 3% 4% 3% 2% 2% 2% Europe and North America combined 3% 3% 4% 4% 3% 4% 3% 2% 4% Worldwide 2% 1% 2% 2% 2% 3% 3% 4% 5% Continental Electronic Brake Systems (EBS) 8% 6% 5% 5% 0% 4% 6% 6% 13% Boosters -1% -4% -8% -7% -3% -3% -1% 1% 3% EPB-Systems 59% 53% 47% 48% 38% 58% 51% 48% 47% Advanced driver assistance systems (ADAS) 46% 53% 59% 58% 51% 45% 38% 36% 40% Engine electronic control units (ECUs) -1% -3% -5% -5% -2% 3% 6% 8% 12% Injectors -8% -8% -11% -11% -5% -5% 2% 7% 19% Transmissions 6% 2% 0% -1% -1% -1% 1% 1% -2% Turbochargers 59% 45% 50% 43% 23% 24% 18% 17% 45% Market data tires PC and LT replacement tires Europe -1% 2% 0% 0% 2% 2% 2% 2% 6% PC and LT replacement tires North America -6% 0% 1% 1% 5% 2% 2% 2% 2% Commercial vehicle tires OE Europe 0% 4% 5% 5% 6% 5% 3% 3% 9% Commercial vehicle tires OE North America 21% 17% 12% 7% -12% -9% -16% -13% -8% Commercial vehicle replacement tires Europe -4% 2% -1% 0% 2% 3% 3% 3% 11% Commercial vehicle replacement tires North America 3% 5% 3% 3% 4% 3% 3% 2% 12% Continental PC and LT tires -1% 3% 2% 5% 9% 8% 6% 6% 5% Commercial vehicle tires -3% 0% 3% 5% 7% 8% 4% 4% 15% ContiTech organic sales growth 2% 4% 4% 4% 3% 2% 2% 2% 8% Note: Following products have been replaced in the statistics in order to better reflect current market trends. The ABS (anti-locking brake systems) and ESC (electronic stability control) are included in an electronic brake system (EBS). The sequential decline in unit sales in early 2016 is largely attributable to the change over from MK60 to MK100 brake system. Calipers have been replaced by electronic parking brake systems (EPB Systems) as the former cable puller handbrake is being replaced ever more often by an EPB. The EPB Systems integrate the caliper into the electronic parking brake. This causes a decline in classical caliper sales which is more than compensated by the increase in EPB systems. We sold more than 14 mn EPB systems in EDMR Equity and Debt Markets Relations 45

46 6) Back-up Key Historical Credit Metrics (mn ) LTM 2017 Statement of Cash Flows Adjusted EBITDA 2 5,094 5,318 6,094 6,125 6,237 Reported EBITDA 5,095 5,134 6,001 6,057 6,190 Net cash interest paid Tax paid ,015-1,047-1,090 Change in net working capital Other Cash flow arising from operating activities 3,722 4,168 4,916 4,938 4,832 Cash flow arising from investing activities -1,904-2,153-3,472-3,167-3,416 - thereof capex in PPE and intangibles -2,024-2,110-2,265-2,708-2,833 Cash flow before financing activities 1,818 2,015 1,444 1,771 1,415 Statement of Financial Position Cash and cash equivalents 2,045 3,244 1,622 2,107 1,896 Derivative instruments and interest-bearing investments Total indebtedness 6,638 6,432 5,245 4,952 4,723 Net indebtedness 4,289 2,824 3,542 2,798 2,768 Credit Ratios Net indebtedness / adjusted EBITDA 2 0.8x 0.5x 0.6x 0.5x 0.4x Net cash interest paid coverage (Ratio) 5 9.5x 33.7x 35.1x 54.8x 55.8x 1 Amounts shown may contain rounding differences 2 Adjusted EBITDA as defined in syndicated loan 3 Includes changes in inventories, trade accounts receivable, trade accounts payable and discounted notes 4 Includes dividends received, income from at-equity accounted and other investments, including impairment and reversal of impairment losses, gains / losses from the disposal of assets, companies and business operations, other non-cash items as well as changes in employee benefits and other provisions and in other assets and liabilities 5 Adjusted EBITDA to net cash interest paid EDMR Equity and Debt Markets Relations 46

47 6) Back-up Capex, Depreciation and EPS Breakdown Q Capex, Depreciation and PPA 1 (mn ) EPS ex PPA 1,2 ( ) % % % Capex (PPE), percentage of sales Depreciation, w/o PPA PPA 1 Amortization of intangibles from PPA 2 Assuming corporate tax rate of 28% 1 1 EPS reported 1 PPA after tax per share 2 EPS excl. 1,2 PPA EDMR Equity and Debt Markets Relations 47

48 6) Back-up Automotive Group Financials Chassis & Safety Sales increased by 12.5% before consolidation and FX effects EBITDA increased by 34.1 mn to mn (+11.3%) Adj. EBIT 1 increased by 25.6 mn to mn (adj. EBIT 1 margin 9.6%) EBIT increased by 25.7 mn to mn (EBIT margin 9.6%) Chassis & Safety Q Sales (mn ) EBITDA margin Adj. EBIT margin 2, , , % 13.8% 13.5% 9.7% 9.6% No PPA effect in Q No special effects in Q Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details EDMR Equity and Debt Markets Relations 48

49 6) Back-up Automotive Group Financials Powertrain Sales increased by 9.5% before consolidation and FX effects Powertrain Q Sales (mn ) EBITDA margin Adj. EBIT margin EBITDA increased by 55.1 mn to mn (+34.7%) Adj. EBIT 1 increased by 52.6 mn to mn (adj. EBIT 1 margin 6.3%) 1, , ,003.1 EBIT increased by 50.6 mn to mn (EBIT margin 5.8%) 9.7% 8.8% 10.7% PPA effect in Q1 2017: mn Special effects in Q1 2017: mn 4.0% 6.3% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details EDMR Equity and Debt Markets Relations 49

50 6) Back-up Automotive Group Financials Interior Sales increased by 11.9% before consolidation and FX effects EBITDA increased by 36.2 mn to mn (+15.2%) Adj. EBIT 1 increased by 33.8 mn to mn (adj. EBIT 1 margin 8.9%) EBIT increased by 25.6 mn to mn (EBIT margin 8.1%) Interior Q Sales (mn ) EBITDA margin Adj. EBIT margin 2, , , % 11.7% 11.9% PPA effect in Q1 2017: mn No Special effects in Q % 8.9% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details EDMR Equity and Debt Markets Relations 50

51 6) Back-up Rubber Group Financials Tires Sales increased by 6.3% before consolidation and FX effects Tires Q Sales (mn ) EBITDA margin Adj. EBIT margin EBITDA decreased by 6.8 mn to mn (-1.0%) Adj. EBIT 1 decreased by 45.7 mn to mn (adj. EBIT 1 margin 17.9%) EBIT decreased by 24.9 mn to mn (EBIT margin 18.3%) PPA effect in Q1 2017: mn Special effects in Q1 2017: mn 2, % 2, % 21.2% 2, % 17.9% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details EDMR Equity and Debt Markets Relations 51

52 6) Back-up Tires Passenger and Light Truck Tire Demand 20% 15% 10% 5% 0% Replacement Tire Demand Development for PC & LT Europe Replacement Tire Demand Development for PC & LT North America 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 PC & LT Tire Replacement (YOY chg. monthly) 1 U.S. Department of Transportation -5% -10% -15% -20% -25% Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 PC & LT Tire Replacement (YOY chg. monthly) 1 Vehicle miles YOY chg. monthly (DOT) Sep-16 Jan-17 EDMR Equity and Debt Markets Relations May-17 52

53 6) Back-up Tires Commercial Vehicle Tire Demand 30% Replacement Tire Demand Development for Truck Tires Europe Replacement Tire Demand Development for Truck Tires North America 30% 20% 20% 10% 10% 0% 0% -10% -10% -20% -20% -30% Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Truck tire replacement (YOY chg. monthly) 1 km BAG monthly (adj.) -30% Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Truck tire replacement (YOY chg. monthly) 2 ATA monthly (adj.) YOY 1 BAG = Bundesamt für Güterverkehr 2 ATA = American Trucking Association (miles traveled) EDMR Equity and Debt Markets Relations 53

54 6) Back-up Rubber Group Financials ContiTech Sales increased by 7.6% before consolidation and FX effects EBITDA increased by 15.2 mn to mn (+8.6%) Adj. EBIT 1 increased by 10.6 mn to mn (adj. EBIT 1 margin 9.6%) EBIT increased by 18.4 mn to mn (EBIT margin 7.7%) PPA effect in Q1 2017: mn Special effects in Q1 2017: mn ContiTech Q Sales (mn ) EBITDA margin Adj. EBIT 1 margin 1, , , % 12.6% 10.2% 9.6% 9.6% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details EDMR Equity and Debt Markets Relations 54

55 Fact Sheets 2015 Q EDMR Equity and Debt Markets Relations 55

56 6) Fact Sheets Sales by Quarter Sales (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety 2, , , , , , , , , , ,497.4 Powertrain 1, , , , , , , , , , ,003.1 Interior 1, , , , , , , , , , ,293.9 Tires 2, , , , , , , , , , ,756.3 ContiTech 1, , , , , , , , , , ,521.4 Other / Consolidation Continental Corporation 9, , , , , , , , , , ,999.9 Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation EDMR Equity and Debt Markets Relations 56

57 6) Fact Sheets EBITDA by Quarter EBITDA (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety , Powertrain Interior , Tires , , ContiTech Other / Consolidation Continental Corporation 1, , , , , , , , , , ,638.5 EBITDA margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation EDMR Equity and Debt Markets Relations 57

58 6) Fact Sheets EBIT by Quarter EBIT (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires , , ContiTech Other / Consolidation Continental Corporation , , , , , , , ,135.1 EBIT margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation EDMR Equity and Debt Markets Relations 58

59 6) Fact Sheets Adjusted EBIT 1 by Quarter Adj. EBIT ¹ (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Other / Consolidation Continental Corporation 1, ,165.5 Adj. EBIT ¹ margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % 2017 Q1 Q2 Q3 Q4 Year Chassis & Safety 12.0 Powertrain 73.0 Interior 20.0 Tires -8.6 ContiTech 8.1 Continental Corporation Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 59

60 6) Fact Sheets Consolidated Statement of Income (mn ) Q1 Q1 Q1 Sales 10, , ,568.9 Cost of sales -8, , ,146.1 Gross margin on sales 2, , ,422.8 Research and development expenses Selling and logistics expenses Administrative expenses Other expenses and income Income from at-equity accounted investees Other income from investments Earnings before interest and tax 1, , Interest income Interest expense Net interest result Earnings before tax 1, , Income tax expense Net income Non-controlling interests Net income attributable to the shareholders of the parent Basic earnings per share (in ) Diluted earnings per share (in ) EDMR Equity and Debt Markets Relations 60

61 6) Fact Sheets Consolidated Statement of Financial Position Assets Assets in millions March 31, 2017 Dec. 31, 2016 March 31, 2016 Goodwill 6, , ,600.9 Other intangible assets 1, , ,298.7 Property, plant and equipment 10, , ,434.9 Investment property Investments in equity-accounted investees Other investments Deferred tax assets 1, , ,815.0 Defined benefit assets Long-term derivative instruments and interest-bearing investments Long-term other financial assets Long-term other assets Non-current assets 21, , ,680.0 Inventories 4, , ,523.0 Trade accounts receivable 8, , ,185.1 Short-term other financial assets Short-term other assets 1, Income tax receivables Short-term derivative instruments and interest-bearing investments Cash and cash equivalents 1, , ,693.8 Assets held for sale Current assets 16, , ,925.9 Total assets 37, , ,605.9 EDMR Equity and Debt Markets Relations 61

62 6) Fact Sheets Consolidated Statement of Financial Position Total Equity and Liabilities Equity and Liabilities in millions March 31, 2017 Dec. 31, 2016 March 31, 2016 Subscribed capital Capital reserves 4, , ,155.6 Retained earnings 12, , ,215.8 Other comprehensive income -1, , ,940.2 Equity attributable to the shareholders of the parent 15, , ,943.2 Non-controlling interests Total equity 15, , ,361.9 Long-term employee benefits 4, , ,306.4 Deferred tax liabilities Long-term provisions for other risks and obligations Long-term indebtedness 2, , ,418.8 Long-term other financial liabilities Long-term other liabilities Non-current liabilities 7, , ,338.2 Short-term employee benefits 1, , ,484.2 Trade accounts payable 6, , ,707.3 Income tax payables Short-term provisions for other risks and obligations 1, , Short-term indebtedness 1, , ,459.2 Short-term other financial liabilities 1, , ,017.5 Short-term other liabilities Liabilities held for sale 0.5 Current liabilities 14, , ,905.8 Total equity and liabilities 37, , ,605.9 EDMR Equity and Debt Markets Relations 62

63 6) Fact Sheets Consolidated Statement of Cash Flows January 1 1 to March 31 In millions Net income Income tax expense Net interest result EBIT 1, ,040.7 Interest paid Interest received Income tax paid Dividends received Depreciation, amortization, impairment and reversal of impairment losses Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses Gains/losses from the disposal of assets, companies and business operations Changes in inventories trade accounts receivable trade accounts payable employee benefits and other provisions other assets and liabilities Cash flow arising from operating activities Cash flow from the disposal of property, plant and equipment, and intangible assets Capital expenditure on property, plant and equipment, and software Capital expenditure on intangible assets from development projects and miscellaneous Cash flow from the disposal of companies and business operations 19.1 Acquisition of companies and business operations Cash flow arising from investing activities Cash flow before financing activities (free cash flow) Change in indebtedness Successive purchases Dividends paid to and cash changes from equity transactions with non-controlling interests Cash and cash equivalents arising from first-time consolidation of subsidiaries Cash flow arising from financing activities Change in cash and cash equivalents Cash and cash equivalents at the beginning of the reporting period 2, ,621.5 Effect of exchange-rate changes on cash and cash equivalents Cash and cash equivalents at the end of the reporting period 1, ,693.8 EDMR Equity and Debt Markets Relations 63

64 6) Fact Sheets Q Results Reported and Adjusted (mn ) by Division Chassis & Safety Powertrain Interior Tires ContiTech Cons./Corr. Corporation Sales 2, , , , , , , , , , , ,999.9 EBIT , ,135.1 in % of sales 9.7% 9.6% 3.7% 5.8% 7.9% 8.1% 21.1% 18.3% 7.3% 7.7% 10.6% 10.3% Amortization of intangible assets from PPA Total special effects Total consolidation effects Total consolidation & special effects Adjusted operating result (adj. EBIT) , ,165.5 in % of adjusted sales 9.7% 9.6% 4.0% 6.3% 8.4% 8.9% 21.2% 17.9% 9.6% 9.6% 11.1% 10.7% 1 Before amortization of intangibles from PPA, consolidation and special effects EDMR Equity and Debt Markets Relations 64